[A-List] Venezuela gives Exxon ultimatum
Henry C.K. Liu
hliu at mindspring.com
Tue Jan 3 20:32:12 MST 2006
Macdonald Stainsby wrote:
> Venezuela gives Exxon ultimatum
> Dec 20, 2005
> BBC News, Caracas
> By Greg Morsbach
> Venezuela has become a key global oil producer
> Venezuela has given the world's biggest oil company, ExxonMobil, until
> the end of this year to enter a joint venture with the state.
> Failure to do so will almost certainly result in Exxon losing its oil
> field concessions in the country.
> Venezuela's socialist government has now signed new agreements with
> almost all foreign petroleum companies.
> After months of pressure from left- wing leader Hugo Chavez most
> foreign oil firms working there have caved in.
> They have agreed to hand over a controlling stake of their oil
> interests to the Venezuelan state.
> This means that Venezuela, which has the world's largest petroleum
> reserves, now calls the shots in what the foreign guests can and
> cannot do.
> In addition, the companies which have signed the new contracts - such
> as Chevron, BP, Shell and Total - will in future be presented with
> much higher tax bills by the government.
> Foreign unease
> But Venezuela says it is only fair that the foreigners are made to pay
> up as they have got away lightly in the past.
> Much of the oil revenue in Venezuela goes into social projects in
> shanty towns and poor rural areas.
> But the US oil giant, ExxonMobil, is digging in its heels and is so
> far refusing to agree to the terms of the new deal.
> Exxon risks losing Venezuelan operations if it fails to comply.
> There is growing unease among foreign energy companies based Latin
> America that they may be forced to become junior partners by a string
> of left wing governments.
> In the case of Bolivia and the apparent shift to the left there
> following elections on Sunday, it is possible that the new government
> will decide to follow Venezuela's example and renegotiate oil and gas
> contracts with foreign investors.
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